BISD seeks new chief financial officer at tough time

Published 9:13 am, Monday, November 25, 2013

Most school districts are deep in their audits of recently concluded budget years, so it's not a good time to go looking for a new chief financial officer, said Beaumont school superintendent Timothy Chargois, who needs to find one.

Chargois has to find a replacement for the CFO he fired last week - along with the district's comptroller - both of whom are the subject of federal investigations into financial impropriety involving an unknown amount of school district money.

In last Thursday's district board meeting, trustees voted unanimously to approve Chargois' proposal to terminate chief financial officer Devin McCraney and comptroller Sharika Allison. A comptroller is a management-level position responsible for supervising the quality of accounting and financial reporting of an organization.

On Nov. 7, FBI agents executed a search warrant of Beaumont school district offices, looking for evidence in connection with fake accounts to bill the school district and divert district funds. Federal education authorities also are involved in the inquiry.

Agents carted away more than 20 boxes of documents, some of them marked "McCraney/Allison" and also seized computer hard drives.

McCraney and Allison have the option to ask for a hearing before Chargois terminates their employment. Since Nov. 7, they were suspended with pay.

In their absence, Chargois hired a Houston-based management company, WCL Enterprises, to provide accounting and audit services. Chargois said he expects the bill to amount to less than $50,000, but if the district has to extend WCL's employment, he will ask the board for a budget amendment to pay for it.

Chargois said he thinks the district will be able to find a new chief financial officer and he will work "expeditiously, but cautiously" to do so.

"I think Beaumont offers a great opportunity," he said. "We believe we'll be able to get a great CFO here."

Trustee Tom Neild said he considers it essential the district reaches outside to find a CFO and one who is a certified public accountant. Neither McCraney nor Allison was licensed by the Texas Board of Public Accountancy.

Neild also is upset that it took a raid by federal authorities to bring attention to financial misconduct.

"Instead of the district being pro-active, it takes a law agency to come in here," Neild said.

Chargois said the district is solvent and is not in any financial distress.

However, its financial controls have been the subject of controversy.

In 2012, the district's electrical contractor, Calvin Walker, had to disgorge $3.2 million in connection with a guilty plea to a federal misdemeanor charge of failure to file his taxes in a timely manner. Walker's plea agreement also prevented his re-trial on federal felony charges that he defrauded the school district, using altered billing documents.

The district could have asked for restitution of $2 million, but it would have required the district to declare itself the victim of a fraud. A board majority was unwilling to make that statement.

Although Walker was not found guilty of fraud, as part of his plea deal with the U.S. Attorney's office, Walker signed what is called a "Factual Basis and Stipulation," in which he acknowledged the elements of the case against him the government had brought.

Because of that admission, the Texas comptroller's office more than a year ago banned Walker from doing any business for the state for five years ending in 2017, saying the document Walker signed contained "sufficient admitted evidence of fraudulent behavior in a procurement setting."

"The actions of Mr. Walker and Walker's Electric constitute a conviction of a crime related to the procurement process," wrote Ron M. Pigott, with the comptroller's office, in an Aug. 28, 2012, letter to one of Walker's attorneys regarding the electrician's "debarment" from state business.

Walker's current attorney is opposing the comptroller's order, contending there is no conviction for the offenses.

Walker continues as the school district's electrical contractor. The board renewed his contract, on a 4-3 vote, in June.

In the McCraney-Allison case, however, Chargois said the school district was victimized.

"We have been victimized and we want to make sure it doesn't happen again," he said.

Chargois said he sees no relation between the Walker case and the FBI investigation into the faked accounts that billed the school district.

"I don't know how a relationship can be made," Chargois said. "Mr. Walker was not (directly) employed by us. We have thousands of vendors we do business with."

The district has appointed a contract administrator to ensure contract compliance, Chargois said.

The administrator's mission is to clearly determine the obligation between the district and the vendor, he said.

"It gives us the management oversight we've not had," he said.

Neild said he sees no difference between Walker's signed stipulation of "fraudulent behavior" and the investigations into McCraney and Allison that resulted in their termination even though they haven't been charged with any crime so far.

"Any information that Chargois gives me, I have no confidence in," Neild said.

Chargois, in reacting to Neild's comment, said he agrees with much of Neild's impatience with the district's financial messes.

"There has to be a high degree of transparency," he said. "These are serious times for us. Let's figure out how to focus on the positives - and not ignore the negatives. I hope my actions have shown that when I have evidence, I can act."